The big push to make India a manufacturing hub through Make in India, Assemble in India and Atmanirbhar Bharat aims to lay the foundation for a competitive economy. One of the main ingredients, along with policy reforms and the ease of doing business, which matters for overall competitiveness and productivity-led growth, is the availability of quality infrastructure, which lowers the costs of trade and commerce. transaction and improve factor productivity. In recent years, efforts have been made for infrastructure development, including higher budget allocations and policy reforms to attract private investment. Some of the mega-initiatives include the Sagarmala and Bharatmala projects, the creation of the National Investment and Infrastructure Fund, the review of public-private partnership (PPP) models based on the recommendations of the Kelkar Committee, the guarantee of the independence of regulators and protection of private investment. . However, the infrastructure sector has been crippled by an increasing gap between supply and demand, inadequate investments, growing dependence on the private sector and an underdeveloped financial sector.
India has seen a huge improvement in its infrastructure in the recent past. However, the plan to turn the country into a five trillion dollar economy with an increased share of manufacturing in GDP has been limited by its infrastructural limitations. According to the World Economic Forum’s Global Competitiveness Report 2019, India was ranked 70th in terms of infrastructure parameters, inferior not only to China (36th), but also to other Asian economies like Malaysia and Korea. South. India’s situation looks even worse when it comes to utility infrastructure. On this parameter, India ranks 103rd, which is lower not only than China (which ranks 65th), South Korea and Malaysia, but also Indonesia (89th), the Thailand (90th) and Vietnam (87th).
One of the major problems in infrastructure development is the lack of synergy between different infrastructure sectors, ministries and departments, resulting in cost and time overruns, and sub-optimal use of resources. A recent report (“FM Pulls Up Infra Ministries for ‘Sluggish’ Capital Spending, Says Public Spending Key to Recovery,” IE, Dec. 18) showed that in the first seven In the current fiscal year, capital spending represented 45.7% of the estimated budget, indicating slow spending in most key infrastructure ministries. Timely public investment is needed to revive the economy, especially when private investment in infrastructure has not yet picked up.
Infrastructure projects require approval and approval from different ministries and departments where timely coordination is paramount. In this context, Gati Shakti – an ambitious national master plan for multimodal connectivity – is a big step forward. It provides an integrated and centralized high-tech platform for the design and execution of infrastructure projects undertaken by several government agencies across the country.
The mega plan integrates all infrastructure initiatives – Bharatmala, Sagarmala, UDAN, inland waterways and dry / land ports – from various ministries and state governments and brings together 16 key central ministries including railways, roads and highways, oil and gas, electricity, telecommunications, shipping and aviation, under a digital platform for integrated planning and coordinated implementation. The planned multimodal connectivity of key economic areas such as agriculture, fishing hubs, electronic parks, textiles and pharmaceutical hubs, industrial and defense corridors will ensure the smooth flow of goods and people across the country, thereby ensuring the smooth flow of goods and people across the country. which will lead to an essential improvement in logistics efficiency. and cost competitiveness. Gati Shakti is likely to help achieve the objective of the proposed national logistics policy. The draft national logistics policy (2019) aims to reduce logistics costs by 13-14% to 10%.
There has been a continuous and significant increase in infrastructure investments over the past few years. Some key initiatives such as Bharatmala, for the expansion and improvement of the quality of the road network, Sagarmala, to modernize the port and waterways, UDAN to increase air connectivity, are implemented not only to fill the gaps logistics infrastructure of the country, but also have a transformative impact on economic competitiveness. There are also mega industrial corridors at different levels of development such as Delhi-Mumbai Industrial Corridor (DMIC), Bengaluru-Mumbai Economic Corridor (BMEC), Chennai-Bengaluru Industrial Corridor (CBIC) and others with the sole objective of improving industrial infrastructure and increasing manufacturing competitiveness. Of these, DMIC, which spans seven states, is the largest mega-infrastructure project with a dedicated 1,504 km freight corridor as a backbone. In addition, a national infrastructure pipeline is in place to facilitate the creation of world-class infrastructure in the country. It covers both economic and social infrastructure projects and envisages an investment of Rs 111 lakh crore in infrastructure during the period 2020-2025.
Despite all these efforts, progress in the infrastructure sector is limited due to a lack of coordination between different ministries and departments who generally work in silos. This is mainly due to the fact that the infrastructure sector falls under various ministries and departments which have their own priorities. This range of actors leads to a multiplicity of approvals and delays in authorizations which in turn exceed the time and cost of the projects. Since the main goal of Gati Shakti is to bring all stakeholders together under one framework with a common vision, it is hoped that this high-tech mega plan will accelerate the completion of infrastructure projects and help the country achieve the goal of five trillion savings by 2025.
Sahoo is a professor at the Institute of Economic Growth and Rai is a Fellow, Indian Council for Research on International Economic Relations